Iranian President Hassan Rouhani reportedly reaffirmed his commitment to closer ties with Armenia when he met with his visiting Armenian counterpart Serzh Sarkisian on Sunday the day after being sworn in for a second term.

Sarkisian was among foreign dignitaries, including the European Union’s foreign policy chief Federica Mogherini, who attended the inauguration ceremony held in the Iranian parliament. He praised Armenia’s “special relationship” with Iran in a newspaper interview published ahead of his latest trip to Tehran.

Official Armenian and Iranian sources said the two presidents discussed Armenian-Iranian economic cooperation, the unresolved Nagorno-Karabakh conflict and broader regional security.

According to official Iranian news agency IRNA, Rouhani spoke of “many commonalities” between the Islamic Republic and its Christian neighbor. He referred to bilateral economic ties, singling out the energy, transport and tourism sectors.

Iran - Armenian President Serzh Sarkisian and other foreign dignitaries attend the inauguration of Iran's President Hassan Rouhani in Tehran, 5Aug2017.

A statement by Sarkisian’s press office said the two leaders discussed joint multimillion-dollar projects planned or already implemented in these areas. Those include the ongoing construction of a new power transmission line which should significantly increase Armenian electricity exports to Iran. Supplies of Iranian natural gas to Armenia will also soar as a result.

The statement said Rouhani and Sarkisian also stressed the importance of trilateral cooperation on energy between their countries and Turkmenistan. Visiting Yerevan last December, Rouhani said Iran is ready to serve as a transit route for Armenia’s plans to import gas from Turkmenistan as well.

The two leaders further discussed continuing negotiations between Iran and the Russian-led Eurasian Economic Union (EEU) on a free-trade deal strongly supported by Armenia. Rouhani told Sarkisian that he is looking forward to the signing of the deal “in the near future,” according to the Armenian presidential press service.

The unresolved Karabakh conflict was also on the agenda, with Rouhani saying that it can have a “solely political” solution. “Iran highly regards complete security around its borders, and we hope that … we could see a peaceful end to the issue,” the Mehr news agency quoted him as saying.

The Iranian leader was also reported to express concern over the possible spread of “terrorism” to the South Caucasus following the defeat of the so-called Islamic State in Syria and Iraq. Regional states must be “vigilant” in the face of this threat, he said.